A Simple Macro-Fiscal Model for Policy Analysis: An Application to Cambodia

Daniel Baksa (), Ales Bulir and Dyna Heng

Asian Journal of Economics and Empirical Research, 2022, vol. 9, issue 1, 21-37

Abstract: Macroeconomic management in many developing countries is often heavily dependent on fiscal policies. This paper develops a semi-structural macro-fiscal model for simulating and forecasting macroeconomic policies in Cambodia. The model is calibrated to capture key characteristics of Cambodia’s economy and serves as a tool for scenario analysis. We demonstrate its application with an illustrative scenario of the macroeconomic effects of the Covid-19 pandemic. The model’s results conform with past empirical analyses of the Cambodian economy and generate intuitive and easy-to-understand policy scenarios. Complemented with near-term forecasting tools and expert judgment, the dynamics of the model help to inform policymakers about medium-term transmission channels and thus guide policy advice. In particular, the results could serve as an input for the country’s medium-term fiscal framework and debt sustainability analysis.

Keywords: Business cycle; Fiscal policy; Cambodia; Forecasting; Simulation; Debt management. (search for similar items in EconPapers)
Date: 2022
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Working Paper: A Simple Macrofiscal Model for Policy Analysis: An Application to Cambodia (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:aoj:ajeaer:v:9:y:2022:i:1:p:21-37:id:3733

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